The boss of Marks & Spencer said “there’s a lot more to do” to return the retailer to its former glory after poor sales over Christmas.
Chief executive Steve Rowe, who is trying to overhaul the business under chairman and retail veteran Archie Norman, said: “We have to stick to the knitting and make sure the business has a long-term sustainable base.
“I’m conscious of that, but we’ve seen some encouraging steps.”
The business, which hit peak profits of £1 billion in the late Nineties, posted a total fall of 2.2% in same-store sales in Britain, with food and clothing and home down 2.1% and 2.4%.
"Until recently declining sales in the clothing and home division had been offset by strong performance from the food business, but now that’s gone into reverse too," said analyst Laith Khalaf at Hargreaves Lansdown.
"As well as traditional rivals like Tesco and Sainsbury, [the food arm] is up against a new breed of online competitors such as Hello Fresh, Deliveroo and Just Eat. These present a particular threat seeing as many of M&S customers are buying a quick meal for that night, rather than a full weekly shop."
The figures, however, were slightly better than some analysts had expected. It made pre-tax profits of £580 million for the year to March 2018.
Rowe added it managed to discount less this Christmas. However, weak consumer confidence, its decision not to take part in Black Friday while other rivals did, and a warm November hurt sales.
Its most recent TV advert starred Holly Willoughby.
